There are several ways to trade Delta turning point. One of the ways is to try to pick absolute top price or absolute bottom price near Delta turning time. However, Delta turning time is not exact on one particular date. Delta gives a probable time zone for reversal, not an exact date. Therefore the danger of trying to pick up a top and bottom price near Delta turning date is that we enter too early and the move has not yet finished. However, sometimes in certain situation, analysis of other system such as Elliot Wave and Ichimoku could yield the same conclusion of imminent turn and this is where it's probably worth it to try to get the best entry price near Delta turning date when everything agrees with each other.
Another safer approach to trade Delta point is to wait for reversal confirmation near Delta turning date before we enter into position. Of course this means that we may have to forgo some pips, but this approach is safer and we could also set up a better and more objective stop loss. The following chart illustrates this approach
For example, let's say we are trying to short and catch a Long Term Top (LTD high) for GBP USD. We could wait for reversal confirmation before we enter into short position. Here's the rule:
Rule: Place a sell (short) at the low of the first day that has a close below the low of the high day.
Rule explanation: When we are nearing Delta turning point, we could start to observe price action. Any day that makes a new high becomes a signal day. We then draw a horizontal line from the low of the signal day several days into the future. We call this the current high day. Let's say the next day market makes a new high again, then this new high becomes the new signal day, and we do the same action above (drawing a horizontal line from the low of the new signal day several days into the future).
We keep doing the above until we have a daily candle close below the low of the signal (high) day. Once we get a daily candle close below the low of the signal day, we place a short (sell) below the low of the day and put stop loss above the signal day.
The above's rule applies for trading a Delta high turning point. For trading Delta low turning point, we just simply reverse the rule
